Bonuses Belie Predictions Of Correlation Blowout Fall

Fears last May's credit correlation crisis would mean meager bonuses have proved unfounded at the firms that have announced check sizes.

  • 06 Jan 2006
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Fears last May's credit correlation crisis would mean meager bonuses have proved unfounded at the firms that have announced check sizes. In fact, equity and credit officials are reporting a general increase in compensation with some senior staffers tipped to see a significant jump on last year's package. The fears were widespread just last month (DW, 12/5).

Goldman Sachs, Bear Stearns, Morgan Stanley and Lehman Brothers have announced bonuses in Europe and officials say credit market survivors have been well-rewarded with payouts for top correlation traders up around 20-30% on last year. The size of payouts awarded to staffers at these firms could not be determined. Lower down the food chain, however, most bonuses are flat or only up 5-10% on last year. One City headhunter said junior staffers at firms which did not recover from significant losses in the spring may even be down on last year. He explained only a handful of credit traders have brought in big money to firms this year and every credit boss on the Street is looking to hire one of these rainmakers, so they have been well paid to dissuade them from jumping ship.

A report by Options Group, a New York-based search firm, estimates bonuses for structured credit--predominantly correlation trading and synthetic collateralized debt obligation businesses--will be up 15 to 20% on average because a shortage of experienced credit professionals is inflating their value.

A similar story is playing out in the equity derivatives market, where a flurry of interest in hiring a few top structurers and sales heads has pushed bonuses up for these select names. "Everybody's after the same big guys," said one equity sales head in London. Most of the hiring action will likely center on staffers with two to five years experience, he predicted, noting revolving doors at some firms may be spinning less this year because there are unlikely to be any new entrants. Barclays Capital and Nomura have been big spenders in the past but officials expect them to be less aggressive this year.

  • 06 Jan 2006

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 242,241.25 929 8.19%
2 JPMorgan 223,842.40 997 7.57%
3 Bank of America Merrill Lynch 216,424.41 725 7.32%
4 Barclays 185,098.93 672 6.26%
5 Goldman Sachs 159,205.64 520 5.38%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 32,522.19 61 6.53%
2 BNP Paribas 32,284.10 130 6.48%
3 UniCredit 26,992.47 123 5.42%
4 SG Corporate & Investment Banking 26,569.73 97 5.33%
5 Credit Agricole CIB 23,807.36 111 4.78%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 10,167.68 46 8.81%
2 JPMorgan 9,894.90 42 8.58%
3 Citi 8,202.25 45 7.11%
4 UBS 6,098.17 23 5.29%
5 Credit Suisse 5,236.02 28 4.54%